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Inactivity of the state and expensive gratuitous privatization

 

     On September 2, 2009 the Accounting Chamber of Ukraine (hereinafter referred to as ACU) circulated the following pres-release:

     Inactivity of the state and expensive gratuitous privatization

     The ACU completed auditing of implementation of Rural Land Titling and Cadastre Development Project in the year 2008. The Project is being implemented on the basis of a loan agreement concluded between Ukraine and World Bank for Development and Reconstruction; the agreement provides for the loan of USD 195 million.

    Results of auditing have proven that the social objectives of the Project, namely exchange of land share certificates for land titles as well as securing of property rights through creation and development of the system of cadastre and for registration of rights in real estate, have not been met.

    Because of inactivity of the Government of Ukraine, of the State Committee of Ukraine on Land Resources along with its subordinate enterprise – Centre of the State Land Cadastre – the financial burden related to the exchange of 3 million land share certificate for land titles was shifted and imposed upon owners of certificates contrary to the objective of the Project.

     In turn, citizens of Ukraine are still unaware of their land rights guaranteed by the Constitution of Ukraine and applicable laws in the field. That is the outcome of the information campaign which has ineffectively been carried out by the State Committee of Ukraine on Land Resources.

     Inappropriate functioning of the state land cadastre is a material barrier for the development of land market and lease relations. It supports illegal seizure of land plots of all patterns of ownership and land raiding.

     Because of supiness of the Government and lack of control over the implementation of the Project, there has actually been spent only USD 18 million out of 195 million over the last 5 years (9.2%). Free of charge exchange of land share certificates for land titles in most cases has been paid for by the citizens, not by the Project.

    Management of the funds allocated by the State Budget for the implementation of the Project was performed by the State Committee of Ukraine on Land Resources ineffectively. For example, out of allocated by the State Budget in 2008 UAH 54.1 million there has been spent UAH 31 million. And UAH 9.5 million out of 31 million was misappropriated.

     As a result, the component E of the Project (Development of Cadastre, total allowance USD 78.4 million) was canceled. As of January 1, 2009 the budget of the Project reduced by USD 94 million.

     The economic sense of the Project as an effective financial instrument for the development of the system of state land cadastre and land registration system has in fact been lost. Persons responsible for this have not been brought to an account and punished.

 

     Source: Accounting Chamber of Ukraine, 2009
     Translation: MyLand, 2009

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